INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Purchases from marbles from unregistered dealers treated as bogus entries for want of evidences - Assessee in penalty proceedings produced affidavits of concerned unregistered dealers

Assessee despite being given sufficient opportunity, failed to prove correctness and genuineness of his claim in respect of purchases of marbles from unregistered dealers to the extent of Rs. 2,26,000. Accordingly, AO created said transactions as bogus entries (standing to the credit of named dealers who were non-existent creditors of assessee and thus made addition under section 68. Held: Assessee in penalty proceedings offered explanation and caused to produce affidavits and record statements of concerned unregistered dealers and establish their credentials. That evidence fully supported the claim of assessee. CIT(A) had not only accepted explanation offered by assessee but also recorded a clear finding of fact that there was no concealment of income or furnishing of any inaccurate particulars of income by assessee. That being the indisputable position, it must necessarily follow that addition of amount of Rs. 2,26,000 could not be maintained.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 1998-99

SUBSCRIBE FOR FULL CONTENT